Mississippi Power Company (MPC) Noncompliant With FAC-009-1 R1 (Now FAC-008-5) and Assessed a $86,000 Penalty

Summary:

Mississippi Power Company (MPC), an affiliate of Southern Company, notified SERC that it was noncompliant with FAC-009-1 R1. MPC failed to establish Facility Ratings for a Facility consistent with the associated Facility Ratings Methodology (FRM). On October 28, 2021, SERC sent MPC an audit notification letter for an onsite audit from February 7, 2022, through February 11, 2022. The audit included FAC-008-5 R6. On January 4, 2022, while responding to the SERC Audit Data Request, MPC identified a discrepancy in the equipment listed versus that installed in the field at a 230 kV substation. At the 230 kV substation, the drawings and database indicated jumpers for the 230 kV line to switch as bundled aluminum conductor steel-reinforced cable (ACSR) jumpers rated at 2,808 amps and the most limiting element (MLE) being the ACSR conductor rated at 1,512 amps. Field verification identified one set of jumpers to actually be single all aluminum conductor (AAC) jumpers rated at 1,496 amps. While the overall change to the Facility Rating is only 16 amps or <1 percent, the MLE was incorrectly identified as the conductor rather than the single AAC jumpers. On January 5, 2022, MPC derated the Facility to 1,496 amps. During the SERC audit, the audit team identified two instances of incorrect element ratings that did not impact the MLE and Facility Rating. After these findings, MPC elected to conduct a walkdown of all MPC Bulk Electric System (BES) Transmission Substations using a risk-based approach. As of March 31, 2025, MPC has completed its walk-down assessment of 106 of 108 Transmission Substations, which is 98 percent of the MPC BES Transmission Substations. Also, in 2019, Southern Company also began a multi-year initiative to implement a single, common Transmission Facility Ratings database (TFRDB) for consistency of records, system-wide to align each of the operating companies. As part of this effort, each operating company conducted a quality assurance review (QA) of the data it would import into the new TFRDB. Overall, for the combined QA assessment and walk-downs, MPC identified 15 total instances where incorrect element ratings resulted in an incorrect MLE and incorrect Facility Ratings at eight different stations. All 15 instances resulted in a derate of the Facility Rating with derates ranging from 7 – 44 percent. MPC did not operate above the correct Facility Ratings. These incorrect ratings were on 115 kV and 230 kV Facilities. MPC also identified 239 instances of incorrect element ratings that did not impact the MLE and Facility Rating. These incorrect ratings were on 115 kV, 230 kV, and 500 kV Facilities. MPC has committed to complete the walkdowns by December 31, 2025, and will report all additional findings to SERC on a quarterly basis. As of March 31, 2025, the two facilities remaining to be walked down are sub-200kV facilities. This noncompliance started on June 18, 2007, when FAC-009-1 R1 became enforceable on MPC and will end by December 31, 2025, when MPC completes the walkdowns and corrects all incorrect equipment and Facility Ratings.

Additional Discussion:

Cause

The cause of the violation was inadequate controls. MPC had inadequate change management controls and legacy equipment identification controls.

Disposition

This noncompliance posed a moderate risk and did not pose a serious or substantial risk to the reliability of the Bulk-Power System (BPS). MPC’s failure to establish Facility Ratings consistent with its FRM could result in violations of System Operating Limits, unnecessary facility trips, damage to facilities, and erroneous planning. However, the risk from the noncompliance was reduced because the incorrect Facility Ratings were limited to 15 Facilities associated with nine different Transmission Substations from the 106 of 108 Transmission Substations evaluated and the QA effort. The derate percentages ranged from 7% to 44%. MPC did not exceed the correct Facility Rating in any identified instance. The incorrect Facility Ratings were limited to the 115 kV and 230 kV systems. Also, MPC and its affiliates (collectively “Southern Company”) reviewed a year of operational data and among the discrepancies derating MLEs, nearly 80% of the affected Facilities never experienced a loading over 80% of their correct rating. Finally, fewer than 3% of the elements reviewed by Southern Company have led to discrepancies in element ratings being discovered and fewer than 0.4% of the elements reviewed resulted in modifications to the Facility Rating. No harm is known to have occurred.

SERC determined that MPC’s FAC-008-5 R6 compliance history should not serve as a basis for aggravating the penalty because while the prior noncompliances of MPC’s Southern Company affiliates were arguably similar, the prior noncompliances arose from different causes and the mitigation activities of the prior noncompliance would not have prevented the current MPC instance. Specifically, the most recent prior noncompliance involved conductors, and mitigation would not have prevented the current violation.

SERC is awarding penalty credit to MPC due to four separate factors. First, SERC is awarding penalty credit for MPC’s cooperation throughout the enforcement process relating to the Alleged Violation. MPC voluntarily provided SERC with information that was timely, detailed, thoughtful, organized, and thorough. MPC fully cooperated in SERC’s investigation of the Alleged Violation and all associated mitigating activities and openly shared information regarding its processes, procedures, internal controls, assets, systems, and organization.

Second, SERC is awarding penalty credit for MPC’s internal compliance program (ICP). SERC recognizes and values MPC’s continuous commitment to improving its internal compliance program (ICP) and the resources it is expending on its comprehensive walk-downs. MPC has also committed to establishing a risk-based walk-down control which will utilize an annual sampling of Facilities to provide assurance of program controls implemented during the baseline walkdowns.

Third, SERC is awarding penalty credit because MPC agreed to settle the Alleged Violation, which avoids a hearing. A willingness to resolve cases without the need for a trial-type hearing reduces the amount of time and resources that SERC, NERC, and the Commission would otherwise expend to resolve the Alleged Violation. Additionally, it is important to promote prompt resolution of enforcement actions so that MPC can focus on mitigation and reducing risks to reliability.

Fourth, SERC is awarding penalty credit because MPC recognized and affirmatively accepted responsibility for its conduct by admitting to the Alleged Violation. There is independent value in MPC accepting responsibility for its violations.

This violation was assessed a penalty of $86,000.